eBay ready to offload Skype

EBay is set to sell its Skype VoIP service to a group of private investors according to a report in The New York Times. The deal could be announced later today said the report.

By
Sumner Lemon and Dan Nystedt
| Sep 01, 2009

| IDG News Service

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EBay is set to sell its Skype VoIP service to a group of private investors according to a report in The New York Times. The deal could be announced later today said the report.

Several investment groups are likely involved in the purchase, including Andreessen Horowitz, Index Ventures and Silver Lake Partners, the report said. Andreessen Horowitz is run by partners Marc Andreessen, co-founder of Netscape, and Ben Horowitz. Andreessen is also a member of eBay's board of directors.

Ebay has reportedly been seeking around US$2 billion for Skype. The company paid $2.6 billion for Skype in October 2005, saying it would enhance communication between merchants and buyers on eBay, but that never panned out. Two years after the acquisition, eBay wrote down Skype's value by $1.4 billion.

Still, Skype continues to be the most popular VoIP service in the world. Its revenue grew 25 percent year-on-year to $170 million in the second quarter, according to eBay, and it added 37.3 million new registered users at the same time, ending June with over 480.5 million registered users.

Ebay has said it planned to sell Skype in an initial public stock offering. Several groups have reportedly been in talks with the company for the communications company, including Skype's founders, Janus Friis and Niklas Zennstrom.

One question that looms over any sale of Skype is access to the peer-to-peer technology that underpins the service. In July, eBay said it was developing an alternative to the technology currently used by Skype because licensing talks with the owner of the technology had broken down.

Related

When eBay bought Skype, the deal didn't include the technology used to run the VoIP service. That technology is owned by a company called Joltid, which licenses the technology to Skype.

Skype brought Joltid to a UK court earlier this year in a bid to resolve the licensing dispute, which led Joltid to terminate the licensing agreement.

"Joltid has alleged that Skype should not possess, use or modify certain software source code and that, by doing so, and by disclosing such code in certain US patent cases pursuant to orders from U.S. courts, Skype has breached the license agreement," Ebay said in a US Securities and Exchange Commission filing in July.

Skype responded to Joltid's move to terminate the license by asking the court to declare the termination was invalid. The court case is due to be heard in June 2010.